Wednesday, 16 January 2013

Several pharmaceutical companies are
actively growing pipelines of their own in China, although at present the
cumulative R&D expenditure of all Chinese pharma businesses amount to less than
the spent of a single multinational corporation (MNC) in the West. Almost all the businesses to date
started off as generics producers who used existing cash flows and pharma
positioning to move into the local innovative sector. Furthermore, whilst
previously 90% of all pharma were state-owned, today roughly 6 out of 10 are
already private.

A downside to local Rx businesses most
often quoted by VCs and investors is the inexperienced approach to R&D and
clinical trials: many companies have burned cash with little consideration or
understanding of regulatory approval prognosis. In addition, the frame of mind
of Chinese businesses still suffers from relative short-sightedness when it
comes to achieving success: many investors and executives do not yet appreciate
the difficult-to-fathom time span of drug development. Unlike in the US VC
arena, where early-stage deals are widespread, in China the lack of confidence
and immaturity of the industry push investor confidence towards later-stage and
established players, particularly ones which have previously received product
approval.

Some of the current drug developers in
China are presented in the table below It is noteworthy that, to date, only one
Chinese product has gained FDA approval—Levonest, a non-patented compound
marketed by Novast Pharmaceuticals. Despite several Chinese INDs currently
undergoing clinical trials in the US, all other products mentioned below have only thus far been approved by the SFDA.

Butylphthalide (NBP)—a compound derived from celery seeds,
acquired from Chinese Academy of Medical Sciences and indicated for the
treatment of mild and moderate acute ischemic
stroke; approved by the SFDA in 2002.